China Semiconductor Equipment Market (2026-2036)

The growth of this market is mainly driven by national policy and state funding for semiconductor self-sufficiency, continued expansion of mature-node, specialty, and memory capacity, and rising investment in advanced packaging and test. However, foreign export controls on advanced equipment, the risk of a spending correction after record stockpiling in 2024 and 2025, technology gaps in domestic equipment, and supply chain dependence on foreign components and materials restrain the growth of this market.

Furthermore, the localization of equipment by domestic manufacturers, the development of domestic lithography, and demand for power and compound semiconductor equipment are expected to offer growth opportunities for the stakeholders in this market. However, localizing critical subsystems and components, servicing and maintaining the installed base of foreign tools under export restrictions, qualifying domestic tools in high-volume production, and developing a skilled workforce remain major challenges impacting the growth of this market. Additionally, the rapid rise of domestic equipment suppliers, the concentration of investment in mature and specialty nodes, growth in advanced packaging and chiplet integration, and capital market support for domestic toolmakers are prominent trends in this market.

The China Semiconductor Equipment Market comprises the equipment used to manufacture, assemble, and test semiconductor devices in mainland China, including front-end wafer fabrication equipment such as lithography, etch, deposition, cleaning, chemical mechanical planarization (CMP), ion implantation, thermal processing, and metrology and inspection systems; back-end test, assembly, and packaging equipment, including advanced packaging tools; and fab facilities and related equipment. The market includes equipment supplied by both domestic Chinese manufacturers and foreign suppliers from the U.S., Japan, the Netherlands and other European countries, and South Korea, measured by billings to fabs located in mainland China. Customers include domestic and foreign-owned foundries, memory manufacturers, integrated device manufacturers, power and compound semiconductor producers, and outsourced semiconductor assembly and test (OSAT) providers. Taiwan is excluded.

China has been the world's largest market for semiconductor equipment for several years. SEMI reported that equipment billings in China reached a record USD 49.55 billion in 2024 and remained at USD 49.31 billion in 2025, about 36.5% of global billings of USD 135.1 billion, even as SEMI had forecast in 2025 that Chinese spending would fall by 24%. The strength reflected aggressive capacity expansion by Chinese chipmakers in mature nodes, memory, and specialty processes, and purchases of equipment ahead of expected further export restrictions. ASML reported that China accounted for 33% of its net system sales in 2025, and 36% in the fourth quarter, well above the approximately 25% share it had forecast in July 2025.

The market is shaped by an escalating series of export controls. The U.S. introduced sweeping controls on advanced semiconductor equipment and technology in October 2022, expanded them in October 2023, and in December 2024 added about 140 Chinese entities to the Entity List and controls on additional types of equipment and high-bandwidth memory. In September 2025, the U.S. Commerce Department extended Entity List restrictions to affiliates at least 50% owned by listed companies. The Netherlands requires export licenses for ASML's most advanced immersion lithography systems, extended from September 2024 to the NXT:1970i and NXT:1980i, and Japan added 23 semiconductor manufacturing equipment items to its export controls in July 2023. ASML has never shipped extreme ultraviolet (EUV) lithography systems to China, and expects China to fall to about 20% of its sales in 2026.

China has responded with large-scale investment in self-sufficiency. The third phase of the National Integrated Circuit Industry Investment Fund, known as Big Fund III, was established in May 2024 with registered capital of RMB 344 billion, the largest of the three phases, and local governments have launched additional funds. Domestic equipment makers, including NAURA Technology, Advanced Micro-Fabrication Equipment (AMEC), ACM Research, Piotech, and Hwatsing, have grown rapidly as Chinese fabs prioritize local tools, while domestic lithography developers such as Shanghai Micro Electronics Equipment (SMEE) and newer entrants seek to close the most significant technology gap. China has also used its own export controls, banning exports of gallium, germanium, and antimony to the U.S. in December 2024, before suspending the ban in November 2025 until 27 November 2026.